Automaker General Motors Co. (GM: Quote) on Thursday reported a 41 percent decline in profit for the second quarter, as losses at its Europe and South America operations offset strong results in North America. However, adjusted earnings per share beat analysts' expectations.
Dan Akerson, chairman and CEO of GM said, "Our results in North America, our International Operations and at GM Financial were solid but we clearly have more work to do to offset the headwinds we face, especially in regions like Europe and South America. Despite the challenging environment, GM has now achieved 10 consecutive quarters of profitability, which is a milestone the company has not achieved in more than a decade."
GM sold about 2.39 million units in the second quarter, up from 2.32 million last year, with growth across all regions except Europe and South America.
In North America, GM reported adjusted earnings before interest and tax or EBIT of $1.97 billion, down 12 percent from $2.25 billion in the year-ago period, even as it sold 4.6 percent more vehicles at 820,000 units.
In Europe, GM's EBIT-adjusted loss was $361 million compared to adjusted earnings of $102 million in the year-ago quarter.
GM International Operations or GMIO reported adjusted earnings of $557 million, almost flat with the prior-year period.
GM South America or GMSA reported adjusted loss of $19 million, compared with adjusted earnings of $57 million in the prior-year period. The latest quarter's results include $100 million in restructuring expenses.
GM's global market share in the quarter was 11.6 percent, lower than 12.3 percent in the prior-year period.
The automaker's second-quarter net income was $1.49 billion or $0.90 per share, down from $2.52 billion or $1.54 per share in the year-ago quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.74 for the quarter. Analysts' estimates typically exclude one-time items.
Adjusted earnings before interest and tax or EBIT was $2.1 billion, down from $3.0 billion in the same period last year. The latest quarter's results include restructuring expense of $100 million.
Revenue for the quarter declined 4 percent to $37.61 billion from $39.37 billion in the prior-year quarter and missed analysts' consensus estimate of $38.58 billion.
GM noted that the decrease in revenue was due almost entirely to the strengthening of the U.S. dollar versus other major currencies.
GM's automotive free cash flow for the quarter was $1.7 billion, down from $3.8 billion in the year-ago period.
Looking ahead to fiscal 2012, GM continues to expect U.S. light vehicle sales in a range of 14.0 million to 14.5 million.
The company also continues to expect that the average of its second and third quarter EBIT-adjusted results in North America will be comparable to the first quarter. GM noted that Europe continues to be very challenging environment.
GM closed Wednesday's trading at $19.66. In Thursday's pre-market, the stock is down $0.06 or 0.31 percent to $19.60.
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by RTT Staff Writer
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